In this 'Guidance for Foreign Enterprises on Entering China's Import Market' blog series, Hongda will provide you a comprehensive guidance on how to start your importation business in China with two different sections.
Considered one of the largest trade markets globally, China has attracted foreign enterprises to establish import businesses, hoping to take advantages of its vast consumer market and robust logistic infrastructure. As a foreign investor, you may also be looking forward to launching import operations in China. However, considering the regulatory framework, you may face difficulties during the whole process.
To help our foreign clients enter the Chinese import-export market smoothly, Hongda has prepared a ‘China Import Market Entry Guidance for Foreign Enterprises’ blog series, which will introduce the overall process to start your own international trading business in two sections. In this first post, we will cover the preparatory steps for establishing an import business in China, including business entity setup, opening a bank account, and obtaining import licenses.
First thing first: Are your products eligible for importation to China?
Before taking action, the very first thing you need to do is to ensure that the products you want to import meet the regulatory requirements of the Chinese Customs. You need to determine whether your product is allowed for import or falls under restricted categories.
You can click the following links to read more about the prohibited or restricted items for import. Please note, the information may change based on new policies, so it is advisable to track the updates or simply contact Hongda for consultation.
- Prohibited items for importation(published on: 2023-11-22);
- Restricted items for importation (published on: 2023-11-22);
Step One: Registering a Company as Importation Entity
After determining the products to be imported, the initial step is to register a company as your operation entity. A WFOE (Wholly Foreign-Owned Enterprise) is a popular choice for foreign investors as it offers them the chance to operational independence and fully control over the company, allowing them to carry out business activities without a local Chinese partner.
At the same time, you need to make an important decision – whether your company will focus on the trading of goods or services. As the tax categories and rates, as well as tax declarations and invoices submissions with local tax department, applied to your company will differ depending on this decision, careful planning will save you time and potential costs.
You are welcome to download Hongda’s WFOE Registration Checklist to know more about the documents needed to set up your own WFOE in China. Or you can simply choose Hongda’s WFOE registration service package and let Hongda help you with the decision making. Feel free to book a meeting here.
Step Two: Opening a Bank Account and Registering with Local Tax Department
Once your company is successfully registered, the next step is to open a corporate bank account for daily transactions with your business partners. The bank account will also be used for tax payments to the local tax departments.
In this stage, you need to provide information regarding your company and your company bank account to the local tax department to register for future tax declarations and invoice processing.
Hongda’s bookkeeping and financial service package is just for you to deal with the tax declarations and reporting all year round. Please read more about our bookkeeping and tax service through this link.
Step Three: Special License Application (if applicable)
For general goods and services operation, additional licenses and permits may not be necessary. However, depending on the type of industry you want to engage in, you may also need specific permits. For example, if you're involved in the import of food, you will need to acquire Food Business License before you can play your part in the food market. Our previous blog revealed the licenses you need to start food operation business in China. If you haven’t read it, kindly go to this blog here for detailed information.
If you indeed require additional permits to support your operation, you can get to Hongda’s special license application service page for a comprehensive list of licenses that Hongda can help you with!
Step Four: Applying for Import/export License
For all companies engaging into import of goods or services, an Import and Expoert License is compulsory. Rather than being a hard copy license, the import and export license is more like a licensing process in which a company undergoes qualification review and registration with government departments. After submitting necessary documents, the Chinese Customs will provide you a Customs Registration Code (or the CR Code) for international trade activity management. You will also get an Electronic Port IC Card for management with the Electronic Port Platform.
Please visit our Import and Export License Application service page for detailed information.
Step Five: Registering with Sate Administration of Foreign Exchange (SAFE)
After obtaining the import-export qualification, you will need to visit the local State Administration of Foreign Exchange (SAFE) office to submit the 'Application Form for the Directory of Enterprises Handling Foreign Exchange Receipts and Payments for Trade in Goods'. This form must be signed by the legal representative and stamped with the company seal. You also need to provide copies of the business license, legal representative's ID, and other required documents. This process registers your company in the Directory and allows you to open a foreign exchange account and fulfill related import-export filing requirements.
To be Continued……
In this blog, Hongda introduced the preparation stages for running your importing business in China. If you have followed all the procedures mentioned above, your company should be ready to start in no time. In our next blog post, Hongda will guide you through the customs declaration procedures when your goods arrive at port, product declaration, inspection, and release.
If you have any questions regarding company registration, bank account opening, special license application, and SAFE registration, please feel free to contact Hongda for a free meeting. We will provide a detailed business proposal for you!
